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CAIE IGCSE Economics 6.4.3 Consequences of Current Account Deficit and Surplus Questions

Evaluate the wider consequences of balance-of-payments imbalances and export changes for an economy and its living standards.

Syllabus
2027–2029
Course
Economics 0455

Exam points

  • Analyse the macroeconomic consequences of a current-account surplus or deficit, including effects on exchange rates, output and employment.
  • Evaluate whether a current-account imbalance or a rise in exports improves living standards, recognising possible short-run and long-run trade-offs.

CAIE IGCSE Economics 6.4.3 Consequences of Current Account Deficit and Surplus Questions question 1

[Maximum number: 1]

What is most likely to directly result from a persistent and large current account surplus on the balance of payments of a country?

A

a lower exchange rate

B

a lower standard of living

C

an increase in gross domestic product

D

an increase in the unemployment rate

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